India: Iron ore exports fall over 15% in Feb'24 on weak Chinese demand post-Lunar holidays

• Exports drop due to Chinese holidays
  
  
• Portside inventories reach 1-year high
  
  
• Iron ore export volumes to remain volatile
  
  

India's iron ore exports (fines and lumps) witnessed a fall of 16% m-o-m in February, 2024 to stand at 4.07 million tonnes (mnt) as against 4.86 mnt recorded in January, 2024, as per data maintained with BigMint.

Moreover, exports of iron ore pellets during the month under review were recorded at 1.11 mnt, a m-o-m decrease of 37% when compared to 1.77 mnt in January.

China largest importer

China emerged as the largest importer of Indian iron ore in February, 2024 at 3.20 mnt. However, import volumes dropped significantly by 31% as against 4.62 mnt in the previous month.

Rungta Mines top iron ore exporter

Rungta Mines remained the largest iron ore exporter in February, 2024 at 0.68 mnt followed by Praful Enterprise and Vedanta at 0.62 mnt and 0.58 mnt, respectively.

Why Indian iron ore exports dropped?

• Weak Chinese demand post-Lunar holidays: China's demand for iron ore did not gain pace as expected post the country's Lunar New Year holidays. Most of the Chinese steel mills had already completed their iron ore procurement before the holidays. In addition, few mills in the northern China region had dropped their production volumes following the sluggish market sentiments. Putting further downward pressure on the market was muted steel demand due to inclement weather and thinning stockpiling activity after the weeklong holidays.
  
  
• Iron ore inventory at 1-year high: Iron ore portside inventory levels at major Chinese ports reached to nearly one-year high at around 131 mnt in February, 2024, marking the highest level since March, 2023, according to data from Steelhome.
  
  
• China's spot iron ore prices decline to four-month low: Iron ore (Fe 62%) fines spot prices sharply dropped to $121.95/t CFR China on 20 Feb'24. Prices are hovering at a 4-month low. Steel mills have lower-than-expected restocking demand for iron ore, as market participants wait for greater clarity on prices. Meanwhile, SteelMint's low-grade index (Fe 57%, FOB East Coast) witnessed a fall of around $10/t to stand at $80/t FOB in February, 2024.
  
  

Outlook

India's iron ore exports in the coming month is anticipated to remain volatile as few Chinese mills are on maintenance shutdown. Since the market returned from the Lunar New Year holidays, there has been a lack of demand leading to steel mills being reluctant in procuring additional port cargoes.